Azernews.Az

Azerbaijan needs a new model of economic development, a World Bank official said on a visit to Azerbaijan Monday.

"Economic diversification and the willingness to reduce oil and gas revenues, as well as to create new jobs in the future, are the main areas," World Bank director for strategy and operations in Europe and Central Asia, Theodore Ahlers, told a two-day forum on economic policy in Baku.

Ahlers said that whereas oil and gas revenues are the driving force of the Azerbaijani economy now, the situation will change in the future despite such large energy fields as Azeri-Chirag-Gunashli and Shah Deniz.

Ahlers said the goal to increase the GDP twice within 10 years, set out by Azerbaijani President Ilham Aliyev, is difficult, but quite feasible.

"This can be achieved through a clear economic policy and implementation of reforms," he said. "In this regard, the start of preparation of a strategic development plan till 2020 is a good signal."

The WB official went on to say that the development of Azerbaijan's oil sector makes it necessary to have qualified professionals and develop human resources.

"For this we need reforms in the education system. Despite directing large amounts of public funds to this field, and some progress in recent years, the situation in Azerbaijan in this field is not the best in comparison with other countries."

Ahlers said Azerbaijan has achieved significant progress in simplifying procedures in the areas of customs, taxation and business registration, but these efforts should be continued.

"Also, it is necessary to note the low share of agriculture in the GDP - only five percent, with a large part of the population involved in this sector [two thirds of economically active workers]. For a country aimed at diversifying the economy, the development of this sector is very important," Ahlers said.

He said a serious problem for the economy of Azerbaijan is the dominance of large companies in many sectors of the economy.

"This problem is characteristic not only for Azerbaijan, but for many countries around the world. Today it's necessary to change the situation in Azerbaijan, and in particular, adoption of a code on competition should make a contribution to this," Ahlers said.

Azerbaijan has been a member of the World Bank since 1992. The bank to date has allocated $2.9 billion to fund 43 projects, which puts the country in third place in terms of its portfolio after Turkey and Kazakhstan.